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Denver Family Practice

For Sale.
Solo
Family medicine practice located in the Denver metro area. This busy practice is
in a modern professional office building and has 4 exam rooms, 1 treatment
rooms, 2 consultation rooms, lab area, nurse’s station, ample parking, and easy
street access. Practice has an excellent payer mix. The practice is on track for
about $840K gross collections in 2018 with the doctor seeing patients about 33
hours per week and about 80 patient encounters per week. The owner doctor
projected 2018 take home income is about $410K.

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Medical Practice Brokers is growing and expanding our presence throughout the
nation.

Upcoming Seminar

Designed exclusively for Medical Practice Owners, this seminar shows you what it takes to sell your practice for the best price.

How Much is my Practice Worth?

I’m constantly surprised that many physicians think they
cannot sell their practice.Don't believe the gossip you hear on the golf course
or at the local medical society meeting.Not every practice sells...but practices sell
regularly, and many for a surprisingly good price.

Why do people
buy practices?

Scratch startups take more time, effort, and risk.

It may be the only way to enter some markets.

To earn above average salary.

Often more profitable than a startup (even after
purchase loan payment).

What do practices sell for?

There is no single magical formula to valuing any
business, especially a medical practice.Though many people still want a rule-of-thumb; so
here are a couple rules-of-thumb:

Most practices will sell for between 1x to 4x annual
net earnings.

Most practices will sell for 20% to 80% of annual
gross collections.

Why is the Price Range so Wide?

One factor is practice type.Average practice price ratios and ranges differ for a
dentistry practice vs. a chiropractic practice vs. a family
practice vs. a cardiology practice vs. an optometry
practice, etc.
Why the general differences?Certain types of practices tend to have more
equipment, or higher doctor compensation expectations, or
rely upon professional referrals, or are more dependent upon
the doctor’s personal reputation, etc.

Within practice
type, there are a number of factors that determine whether
your practice will sell for above or below the average.At Medical Practice Brokers we look at 41 different
practice characteristics to help determine practice value.Sample factors include:

Profitability

Income history

Transferability of goodwill

Location

Facility

Equipment

Provider hours worked & production

Payer mix

Demographics

Let’s use the Internal Medicine (IM) practice category as
an example.Our
data show that IM practices sell for an average of 35.2% of
annual collections, with a standard deviation of 21.6%.Most practices will sell for ±2 std dev below or
above the average sales price.In the below graph, you can see that the highest
percentage of IM practices (i.e., 13.7%) sell for between
20%-30% of annual collections.But some are selling for less than 10%, and others as
high as 100% of annual collections.As you can see, there is a very wide spread.

Now let's contrast Internal Medicine
practice values with that of General Dentistry practices.
Our data show that general dentistry practices sell for an
average of 62.7% of annual collections, with a standard
deviation of 23.1%.Most practices will sell for ±2 std dev below or
above the average sales price.In the below graph, you can see that the highest
percentage of IM practices (i.e., 13.7%) sell for between
20%-30% of annual collections.But some are selling for less than 10%, and others as
high as 100% of annual collections.As you can see, there is a also very wide spread for
dentistry practices.

However, we see a very different pattern for the two
different types of practices. There are many different
reasons for differences in the value pattern. For
example, internal medicine physicians and dentists have
different compensation expectations. There are
different industry and regulatory risks. Insurance
payer mix and reimbursement have different patterns.
Dentistry practices generally have considerably more value
invested in equipment compared with internal medicine
practices. Etc.

Similarly, one will see very different patterns based
on the type of practice.

Can you sell your practice?

Chances are that yes you can sell your practice.Most practices in or near major metropolitan areas
will take 6 - 12 months to find a buyer.Call today for a free telephone consultation at (719)
487-9973 or email david@practicebrokers.com.